Officials are struggling to find suitable land for housing in the face of 'infinite' demand from indigenous New Territories residents to build village houses, the development minister says. Carrie Lam Cheng Yuet-ngor was speaking as approvals and applications from villagers exercising their right to build under a four-decade-old policy hit record levels for at least the past 10 years. 'I must point out that the biggest trouble for us [in seeking housing land] is the demand for small houses today cannot be quantified. It could be infinitely high,' said the secretary for development, who poured cold water on expanding village zones and allowing bigger village houses. According to figures obtained by the South China Morning Post, 2,154 applications for building small houses were received by the Lands Department in the past year, and it granted 1,344. Both figures were the highest since at least 2001. There are 6,339 outstanding applications. Lam was referring to a policy that began in 1972, under which indigenous male descendants have the right to build a three-storey house with a footprint of 700 square feet on their own land or on government land zoned for villages. Urban residents have long criticised it as unfair while beneficiaries argue it is part of their 'traditional rights' protected by the Basic Law. Lam said demands by the rural representative body, Heung Yee Kuk, for continuous land supply for small houses would pose a 'very big difficulty'. 'If we considerably expand village zones ... it will have an adverse impact on our job in satisfying the housing needs of general citizens and in developing other industries.' A hint that the kuk may seek an expansion of the zones was dropped by vice-chairman Cheung Hok-ming last week. He told a Legislative Council meeting catchment areas for reservoirs could be used, although he did not specify village zones. The minister also said it would be difficult to realise a recent suggestion by former chief secretary Henry Tang Ying-yen - an undeclared chief executive candidate - that the floor area of village houses could be expanded and the height limit raised to nine floors. The multistorey idea was floated, and later abandoned, in 2006. Expanding the village zone boundary would also cause conflict with other developments, Lam said. Yuen Long, with 975 house requests and 770 granted last year, has the keenest demand among eight rural districts, followed by North District's 364 requests and 123 grants. Policymakers keep no statistics on the male indigenous villager population. The closest estimate was in 2003 by the kuk, which put the number at about 240,000. But Leung Fuk-yuen, chairman of the kuk's Shap Pat Heung Rural Committee, said it was 'silly' of Lam to exaggerate the demand for small houses because the birth rate in indigenous villagers was low. 'Village families now only have two to three kids,' he said. 'For sure officials have an idea how many of us are there since village heads will report to them regularly.' Legislative Council housing panel chairman Lee Wing-tat said the small house policy was hard to sustain. 'Urban residents have to join a very long queue in waiting for public rental housing,' he said. 'Rural land owned by the government should be used to build public housing. To just cater for the needs of indigenous villagers would create a social divide.'